Honda says electric two-wheelers viable without subsidies

"Our pricing strategy will not be dependent on any government subsidies,” Yogesh Mathur, director for sales and marketing at HMSI said.

By Kiran Murali

28 Nov 2024

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Honda says electric two-wheelers viable without subsidies

At a time when several OEMs are pushing for continued government support in the form of demand incentives for faster electric vehicle adoption, Honda Motorcycle & Scooter India (HMSI) is developing its electric vehicle portfolio in such a way that the product remains sustainable and its prices are competitive even without government subsidies

“We developed our products, keeping aside any kind of subsidy. We developing everything without any government intervention in terms of our products. Our pricing strategy will not be dependent on any government subsidies,” Yogesh Mathur, director for sales and marketing at HMSI, said while launching the company’s first set of electric two-wheelers.

Government subsidies in the form of demand incentives and waiver of registration fees have been very instrumental in driving the early-stage adoption of electric two-wheelers and three-wheelers. The Centre has been providing incentives since 2015 through FAME, EMPS and PM E-Drive scheme, and several OEMs have been saying that subsidies need to be continued for the sustained growth of the industry.

Earlier this year, Hero MotoCorp CEO Niranjan Gupta had said the electric vehicle market is still in its early stages and he believes that subsidies will be necessary for a while to help the industry grow. Once it reaches a point where it can sustain itself financially, subsidies can be gradually reduced, he said.

Honda on Wednesday introduced the Activa E and QC1 electric scooter as the first set of its electric vehicles for the Indian market. Activa E comes with a swappable battery solution, while CQ1 has a fixed battery. The company is yet to announce the pricing of both models.

Currently, the government’s 2-year PM E-Drive scheme provides a subsidy of Rs 5,000 per kWh to electric two-wheelers with fixed batteries, subject to a cap of Rs 10,000 per vehicle. The subsidy will be tapered down to Rs 2,500 per kWh with a cap of Rs 5,000 per vehicle from April 2025. Senior government officials said the incentives are unlikely to be extended beyond the financial year 2026.

“We will start the booking for both the models in January. At the time we will be announcing the price because we need to gauge in terms of the response from the market and price it accordingly. But the pricing will be affordable,” he said.